How to spot outliers in regression analysis
Much of the debate over the possible pause in surface temperatures since 1998 really hinges on 1998 being an outlier. And not only an outlier but an influential data point, which means that its very presence changes the overall regression trend. In this post, I'll show how to identify outliers, high-leverage data points, and influential data points. First, some basic definitions. An outlier is any data point that falls outside the normal range for that data set, usually set as being 2 standard deviations from the average. In regression analyses, an outlier is any data point where its residual falls outside the normal range. High leverage data points are made at extreme values for the independent variables such that there are few other data points around, regardless of whether or not those data points change the overall trend. An influential data point is an extreme outlier with high leverage that alters the overall trend. Now for the analysis, sta...